The Relational Lens
Understanding, measuring and managing
John Ashcroft, Roy Childs, Alison Myers and Michael Schluter
Excerpts from the manuscript
scheduled for publication by
Cambridge University Press
in Spring/ Summer 2016,
The dark matter of organisations
Why organisations should start thinking relationally
Relational, social, individual, financial, environmental
How to measure relationships
Directness: high touch organisation
Continuity: connection across time
Multiplexity: context for breadth
Parity: power, balance, fairness
Commonality: overlap of purpose
What Relational Proximity builds
Relationships between stakeholders
Managing, measuring, reporting, regulating
The dark matter of organisations
The Deepwater Horizon oil spill is a story about relationships between stakeholders.
It began on 20 April 2010, with the Macondo blowout – effectively an explosion separating the rig from the well. The rig sank and oil flowed from the sea-floor gusher into the Mexican Gulf for eighty-seven days. It was the largest accidental marine spill known in the petroleum industry, with total discharge of crude oil estimated at 4.9 million barrels and eleven direct fatalities. The primary stakeholders in the well were BP, rig owners Transocean and rig operators Halliburton. There were millions more, but many didn’t realise they were stakeholders until the oil slick began to spread: populations on the Gulf coast; owners and employees in the tourism and fishing industries; and, further out, savers across the world whose pension funds held BP stock.
Subsequent reports on the disaster – of which there were many – pinpointed specific failings in equipment, procedures, training and oversight. These came to some fairly predictable conclusions. For example, a US Government report released 5 January 2011, stated that ‘whether purposeful or not, many of the decisions that BP, Halliburton, and Transocean made that increased the risk of the Macondo blowout clearly saved those companies significant time (and money).’ At the same time, it was noted, government regulators did not have sufficient knowledge or authority to notice these cost-cutting decisions.
In reality this is about more than whether people and companies are being greedy or irresponsible: it is about the ways in which stakeholder groups are connected together, and how those connections incentivise or disincentivise certain types of behaviour. The pressure on all three companies involved in the spill to cut costs derived from the importance of good quarterly reports as a key ingredient in the way that public limited companies manage their relationship with investors. But that is not an issue any regulator is likely to act upon. The actual human relationships created between stakeholders by markets and systems of regulation are, for all practical purposes, invisible.
There is a strange parallel here with astrophysics. As far back as Galileo, astronomers have assumed that the universe is something you can see. Yet astrophysicists estimate that visible matter accounts for only four per cent of the mass of the universe, and doesn’t come close to explaining how galaxies behave. What drives the motion of the universe is dark matter – material which exerts immense gravitational pull but which telescopes are unable to detect. At first this analogy might seem far-fetched. After all, relationships are all around us; no society exists without them; they enable life – personal life, business, communities – to function. And yet they are invisible in the sense of being so pervasive that their influence is often taken for granted. And, like dark matter, their impact is felt far more deeply and far more extensively than most people realise – and it doesn’t need a major oil spill to show their effects.
The premise of the book, and of the tools and courses that complement it, is simple. It is that success – in business, in community building, in public service, in life – depends upon getting relationships right; that leadership (in whatever context and at whatever level it is exercised) depends upon the ability to build and sustain relationships; and that real change starts by realising that relationships are both measurable and a basis on which to improve performance. It is possible to create the conditions within which people are more likely to form and conduct effective relationships, and to approach relationships in organisations in ways that enable constructive discussion and actionable solutions.
Overall, that approach could be termed thinking relationally. This is sometimes easier to talk about than do, because effective management of relationships needs, first, a better understanding of the relational dynamic, and second, a better grasp of how to work with and through relationships to make realistic change possible. Most people do not read relationships accurately – partly because they have to view their own relationships from one end. They sometimes fail to anticipate the consequences of their choices and actions. Perhaps most important, the culture they live in determines their scale of values. People think individually, in terms of their own planning and interests. They think financially, by using currency as a means of comparison. It is not instinctive to think relationally – even though almost anyone will say that relationships are important. Thinking relationally requires effort.
In organisations, as everywhere else, relationships are key to getting things done, but can also be hard-to-shift obstacles; they create value, but destroy it when they go wrong. Cultivating healthy, effective relationships is no easy task. So this book, which reflects a single approach but a diversity of professional viewpoints, looks first at the vital importance of relationships themselves, exploring how they shape the way we think and act. It then moves on to examine a framework called Relational Proximity – a scalable analytic tool which has been used successfully for twenty years to understand, measure and influence relationships in organisations, and which can be applied at almost any level in the private and public sectors worldwide.
Summary of Chapters 4-8
To understand and analyse how both external/structural and internal/psychological factors combine to shape the relationship and its outcomes we use the Relational Proximity framework. This is a measure of the distance in the relationship between people or organisations which determines how well each engages with the thinking, emotions and behaviour of the other.
A relationship is more than a mere interaction or causal connection can be said to exist where there is:
- a series of encounters with another person, group or organisation
- …which are shaped by the experience (memory) of past encounters and the expectation (imagination) of future encounters;
- …where the other is known, or at least knowable;
- …where the actions of each can affect the other;
- …within some shared context or motivation.
On this basis, our approach is based on five broad domains of relationship: communication, time, information, power and purpose. For each of these domains there is a main mechanism of influence on the relationship.
Communication: The way in which contact is made, including choice of the medium of communication
Time:The time span over which these contacts take place and the ways gaps between them and transitions are managed
InformationThe opportunities to gain greater breadth of knowledge through a variety of sources and contexts
PowerThe use and distribution of power; and
PurposeThe ways in which difference is both valued and managed.
These mechanism shape the fundamental processes of a relationship, influencing both the way in which the relationships is experienced and the outcomes that are achieved. A feedback loop also operates here, as negative experiences and poor outcomes may change the way in which individuals or organisations acts, or the effectiveness with which the core processes operate. So, for example, face to face contact which sustains effective communication and is both emotionally supportive and intellectually creative may encourage higher levels of contact in which both parties are fully invested. But if the contact is experienced as abusive, results in misunderstanding, or establishes little sense of connection then future contact may be reduced, and what contact there is may be characterised by reticence and defensiveness.
This allows us to think about how relationships are best managed and influenced. Politicians cannot legislate better relationships into existence. Managers cannot make staff like their customers or colleagues. But it is possible to create an environment in which relationships that can sustain the desired outcomes are more (or less) likely to be established. We can think about how policies, organisational structures, working practices, technology or culture influence the way in contact is made, the time that is available and how it is used, the opportunities to gain greater breadth of knowledge about counterparts, the ways in which staff can exercise power or customers be empowered, or how shared purpose may be enabled or conflicting objectives increased. This opens up a far more constructive discussion and analysis of relationships, and one that is capable of drawing on a wealth of insight from different disciplines.
Directness: communication and connectedness
Connectedness is felt to a greater or lesser extent when people, organisations or members of a group encounter each other. An encounter can include physical, emotional, intellectual or even spiritual dimensions.
To be connected is to be linked in. Within groups, communities and organisations this means being present to some degree in others’ thinking, planning and decision making. A connection also allows exchange, with the nature of the connection influencing the quality of communication processes.
Working with Directness means choosing the right type of contact to manage the gaps or distance in a relationship – gaps that arise from being in different places, from a time lag in communication or from a lack of openness. Contact can be mediated or filtered by technology, by other people or by the degree of disclosure. A relationship with high levels of Directness will have little separation between the participants and is more likely to deliver good quality communication; its sense of connectedness will contribute positively to levels of engagement.
Continuity: momentum and belonging
Continuity turns encounters into relationships. Time together over a period of time builds a shared storyline in which the present is understood in the light of the relationship’s past and in expectation of its future. A storyline develops most strongly when something endures from one encounter to another. The pattern and coherence of the storyline gives momentum to the relationship, and a sense of belonging together. Where momentum is strong, productivity, accountability, commitment and reputation are also likely to be high. Change and progression occurs around a resilient core of stability.
The practice of Continuity supports and encourages interactions to build on each other effectively to create a storyline. Little time spent meeting or in contact, and much time spent apart, challenges the development of a shared storyline. Working with Continuity, therefore, involves managing time spent together and apart, making effective links between encounters and telling the shared relational story.
Multiplexity: transparency and mutual understanding
The knowledge that we have about other participants in a relationship, and they have about us or our organisation, shapes the relationship. For the individual, valuable information ranges from work based skills, roles, and pressures through family and community support and responsibilities to more internal values and motivations. Organisational equivalents include product and service lines, market position, ethical challenges, and corporate culture. ‘
We want and need to know other people and organisations but our knowledge is always imperfect and incomplete. This may be due to the complexity of human beings, groups and organisations, the way in which we are consciously or unconsciously different in different relationships, and the desire to conceal part of ourselves or project a particular brand identity or persona. Gaps in our knowledge create the potential for missed opportunities, misunderstanding and even deceit. Our ability to evaluate others and to manage the relationship may be compromised as a result.
Multiplexity - building and making use of many stranded relationships - is a means to greater breadth of information in a relationship. By accessing varied sources of information, and broadening those which already exist, it is more likely that mutual knowledge in a relationship will be authentic and complete.
Parity: Fairness, mutual respect and participation
The distribution and exercise of power in a relationship dictates the extent to which a relationship is experienced as fair. Fairness is embedded in the activities of the relationship and the way they are conducted – the distribution of risk and reward, in the design and execution of its processes, or in the degree of influence participants enjoy. A fair relationship is more likely to be sustainable and productive over the longer term.
At a personal level, Parity – the fair distribution of power – is felt as mutual respect. Conversely, the existence of respect for self and others shapes the exercise and response to power in the relationship or group. The combination of respect and fairness is an important determinant and consequence of the degree of participation in the relationship. Disengagement, abuse of power, and negative or defensive reactions are risked by the absence of respect.
Working with Parity means considering the use and distribution of power such that the relationship is considered to be fair and mutual respect is apparent. Parity moderates the use of power and influence in a relationship, so as to shape the ability and willingness of both parties to engage and contribute.
Commonality: synergy and identity
Commonality is the process by which purpose is aligned or shared between participants in a relationship, a community or an organisation. It provides a reason for the relationship to exist and defines the common ground on which it is based. In practice sharing purpose is a complex process – the sources of, and influences on, relational purpose are many, so the degree of alignment necessary and achievable is important to determine.
Strong relational purpose supports the high performance of synergistic team working and generates organisational identity.
Working with Commonality means articulating purpose clearly and appropriately, working to align both breadth and depth of purpose, harnessing the benefits and managing the challenges of diversity, in order to increase the strength of a relationship and its outcomes.
What Relational Proximity builds
In managing stakeholder, professional or personal relationships we may seek relationships that display a variety of characteristics: trust, empathy and understanding, commitment or accountability, for example. While these can be measured directly, looking in more detail at the extent to which Relational Proximity creates the conditions that support these outcomes is more likely to point to actions that can be taken to improve the relationship, or identify risks.
Summary of Chapters 9-11
Relationships between stakeholders
Any organisation – whether a company, school, hospital or NGO – can be viewed as a matrix of relationships. The integrated thinking that Mervyn King describes as ‘seeing the connections of the resources and relationships’ and the way they work together in achieving strategic objectives, contrasts with the tunnel vision that Paul Seabright sees as a necessary corollary of ‘dealing with strangers’. The Relational Proximity framework can be used to shed light on the key issues surrounding these relationships.
Ownership, purpose and responsibility
Are companies aiming for the right goals? ‘Conscious Capitalism’ and other moves to articulate richer accounts of the purpose of companies.
Have we got ownership patterns right? Impact of limited liability and high frequency trading. Benefit Corporations as examples of new forms of company structure.
Have we got the financing model right? Relational analysis of debt vs equity finance and the weakness of the ‘investment supply chain’.
Relationships in public services are influenced by the understanding of the goals of the services, patterns of funding and accountability, and the nature of professions
Public sector goals: Criminal justice, welfare, education, health and housing can all embrace more relational goals which then changes the relationships with stakeholders.
Does accountability work in the public sector? Patterns of funding and accountability can create incentives that impede collaboration and distort relationships with stakeholders.
Can independent agencies coordinate properly? Major service failures are often linked to failures in inter-agency and inter-professional relationships.
Stakeholder relationships cannot be just a bolt-on to an organisation: getting relationships right means changes to the way an organisation sees issues and how it acts. It fundamentally changes the nature of the organisation with implications for culture, size and processes, among other issues.
The relational implications of organisation size are explored and a Relational Business Charter set out as an exemplar of what it might mean to commit to improved stakeholder relationships.
Managing, measuring, reporting, regulating
A series of case studies are used as the basis for showing how Relational Proximity aids the management and measurement of stakeholder relationships.
Managing: Everyone can reflect on and improve their relationships. Sometimes, of course, the involvement of other parties is needed to make changes. Joint reflection can highlight the differences in perception, bringing into focus the blind spots in our own analysis. Yet there will always be steps that one party can take to improve, or at least ameliorate the negative impact, of a relationship.
Managing through regular review: This should be an element of the regular management cycle – not just a response to problems. This allows risks to be identified early and the benefits of the relationships to be maximised. For example, KPMG used relational metrics to examine and improve the relationship between a major UK food and clothes retailer and a major global NGO.